Erroneous reimbursement

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Hello,

I have a question about insurance reimbursement for health visits. I had full insurance coverage for a health appointment last year, but there was an issue with the insurance claim. My insurer initially determined that I was responsible for paying the provider, and it sent me a reimbursement check for part of the cost. The provider never billed me, and I never cashed the check. The insurance claim was later corrected, and my insurer concluded that the claim was fully covered (meaning the reimbursement check should not have been issued). Should I include this on my tax return somehow? Is the check considered taxable income given that the provider never billed me?

Thank you for your assistance.

[Vanessa A]

It might be. You may want to resolve this with your insurance company before moving forward.  If you call the insurance company and they cancel the check, then it would be like you never received it and it would not be taxable income.

If they say keep the check, whether or not you cash it, then it would be income you constructively received and since it would no longer be a reimbursement for medical expenses, it would be considered a gain so you would need to report it as income which you can do so by selecting the following:

1. Federal
2. Income and Expenses
3. Scroll down to Less Common Income and click Show More
4. Start next to Miscellaneous Income
5. Start next to Other Reportable Income